India’s Securities and Exchange Board (SEBI) has proposed significant changes to related party transaction (RPT) norms under LODR regulations. The proposed amendments include raising the shareholder approval threshold to ₹5,000 crore and removing disclosure requirements for transactions below ₹15 crore. The aim is to ease compliance while strengthening transparency and corporate governance for listed companies in India.
The Securities and Exchange Board of India (SEBI) has put forward substantial regulatory reforms to ease the compliance burden related to Related Party Transactions (RPTs) under the Listing Obligations and Disclosure Requirements (LODR) framework. As per a consultation paper released on Monday, SEBI proposes increasing the shareholder approval threshold from ₹1,000 crore to ₹5,000 crore for transactions involving related parties.
The proposed amendment means only transactions above ₹5,000 crore or 10% of a listed entity’s consolidated annual turnover (whichever is lower) would need shareholder consent. Smaller transactions will be exempted from this requirement, streamlining corporate operations and reducing procedural delays.
Additionally, SEBI has proposed removing the requirement to disclose RPTs valued below ₹15 crore. This would significantly reduce disclosure obligations for low-value transactions that do not materially impact financial or governance outcomes, easing compliance particularly for mid-sized firms.
A corporate governance expert said, “These proposed revisions reflect SEBI’s intent to make regulations more proportionate and focused. While easing compliance for companies, the changes maintain high governance standards for larger, more impactful transactions.”
Graded Disclosure Framework Introduced in 2025
In February 2025, SEBI introduced a graded disclosure framework for RPTs, requiring listed entities to classify transactions based on their materiality. Depending on thresholds tied to turnover, net worth, or profit/loss, entities must provide comprehensive, limited, or minimum information when presenting RPTs to the audit committee or shareholders.
The disclosures must include transaction value, rationale, historical records, valuation reports, and statements by the audit committee. This framework ensures adequate scrutiny of high-risk transactions while preventing over-disclosure of immaterial ones.
SEBI’s RPT Portal Improves Transparency
In a further move to promote regulatory transparency, SEBI launched a dedicated RPT analysis portal in July 2025. The portal standardizes how listed companies disclose and report RPTs, improving public oversight.
The portal enables investors, analysts, and stakeholders to access structured data regarding the nature, frequency, and scale of related party transactions. This step supports SEBI’s broader objective of strengthening corporate governance by making such transactions easier to monitor and evaluate.
SEBI’s proposals are currently open for public consultation. Final guidelines will be shaped based on stakeholder feedback, with the aim of aligning regulatory norms with evolving business needs while upholding governance integrity.
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